The Old New Altruist
Let's start with a cartoon:
Effective altruists do things like the following: living modestly and donating a large part of their income—often much more than the traditional tenth, or tithe—to the most effective charities; researching and discussing with others which charities are the most effective or drawing on research done by other independent evaluators; choosing a career in which they can earn most, not in order to be able to live affluently but so that they can do more good; talking to others, in person or online, about giving, so that the idea of effective altruism will spread; giving part of their body—blood, bone marrow, or even a kidney—to a stranger.
Here is a capitalist view on altruism from Samasource founder Leila Jamah:
Rather than try to do the most good as quickly as possible, I suggest a long-term focus that leverages social business. Singer alludes to this concept in discussing a factory in a poor country that pays living wages and reinvests some profit into community initiatives. For Singer, the entrepreneur who established the factory will live a “minimally decent ethical life.”
Creating living-wage jobs for poor people, so long as one avoids negative social and environmental externalities, is the maximally decent ethical choice. Such organizations also achieve more for each donor dollar. Since the costs of poverty alleviation are offset by revenue, donating to that factory to set up a health initiative for workers, say, would go much further than donating to a traditional nonprofit.
Paul Mason offers up some interesting words on "the end of capitalism" over at the Guardian:
Capitalism, it turns out, will not be abolished by forced-march techniques. It will be abolished by creating something more dynamic that exists, at first, almost unseen within the old system, but which will break through, reshaping the economy around new values and behaviours. I call this postcapitalism...
Almost unnoticed, in the niches and hollows of the market system, whole swaths of economic life are beginning to move to a different rhythm. Parallel currencies, time banks, cooperatives and self-managed spaces have proliferated, barely noticed by the economics profession, and often as a direct result of the shattering of the old structures in the post-2008 crisis.
You only find this new economy if you look hard for it. In Greece, when a grassroots NGO mapped the country’s food co-ops, alternative producers, parallel currencies and local exchange systems they found more than 70 substantive projects and hundreds of smaller initiatives ranging from squats to carpools to free kindergartens. To mainstream economics such things seem barely to qualify as economic activity – but that’s the point. They exist because they trade, however haltingly and inefficiently, in the currency of postcapitalism: free time, networked activity and free stuff.
You know what is messing with capitalism? Geeks says the Economist looking at the way Silicon Valley has supplanted Wall Street as king of the hill and creating a potential "charmed circle with great wealth becomes cut off from everyone else":
The empire of the geeks draws its strength from a culture of techno-evangelism that enables entrepreneurs to rethink old systems and embrace new ones. Many denizens of the Valley believe that tech is the solution to all ills and that government is just an annoyance that still lacks an algorithm. So far the public’s relationship with the tech titans has been mostly harmonious. Consumers enjoy their taxi-hailing apps, music streaming and voice-recognition software.
Yet cracking open established industries inevitably results in conflict. Uber is the firm most embroiled in controversy, whether facing licensed taxi-drivers on the streets or demands from its own drivers in the courts. European regulators are also scrutinising firms like Facebook and Google for everything from antitrust concerns to data protection. And American regulators are reportedly looking at whether Apple has abused its clout in the music business.
And perhaps you are familiar with our worship of the entrepreneur. Well, Aimee Groth over at Quartz says these guys don't necessarily have something special, other than maybe privilege:
[W]hat often gets lost in these conversations is that the most common shared trait among entrepreneurs is access to financial capital—family money, an inheritance, or a pedigree and connections that allow for access to financial stability. While it seems that entrepreneurs tend to have an admirable penchant for risk, it’s usually that access to money which allows them to take risks. And this is a key advantage: When basic needs are met, it’s easier to be creative; when you know you have a safety net, you are more willing to take risks. “Many other researchers have replicated the finding that entrepreneurship is more about cash than dash,” University of Warwick professor Andrew Oswald tells Quartz.
Over at the Jacobin, Jennifer Mittelstadt makes the case for rethinking the New Deal, which she says created more benefits for those already reaping rewards for the "networks of exclusion", such as racism and sexism:
Those of us who value social and economic security, and embrace a radical program of social provision that challenges the drives of capital, must also look forward. We face a challenge just as difficult as the one facing activists and reformers in the 1930s — but of a far different kind.
Today we confront anti-state, pro-corporate politics stronger and more pervasive than during the Depression. We must incorporate the claims of a far more diverse set of Americans — all those still waiting on their New Deal — and we are not inventing welfare, but taking on the unprecedented task of building from the ashes after its end.
If we are to realize the long overdue New Deal for everyone — and then go beyond even that — we’ll need an abundance of imagination rather than nostalgia.
And over at the Atlantic, Nancy Cook looks at the efforts of the Freelancers Union and says workers in the so-called gig economy need safety nets:
It is hard to find an accurate estimate of the number of freelance workers who participate in the so-called sharing economy, which is dominated by technology companies that rely on freelancers for much of their labors—Uber, Lyft, Postmates, Instacart, and the like. The U.S. Government Accountability Office estimated this spring that the freelance workforce ranges anywhere from less than 5 percent to more than a third of the nation's workforce, depending upon how freelance workers are defined. GAO found that freelancers were more likely to be young, Hispanic, and relatively poor.
Starbucks continues to innovate on the addressing low-income workers, unveiling a plan recently to "find jobs for 100,000 unemployed young people over the next three years," reports the New York Times:
The effort, to be called the 100,000 Opportunities Initiative, is aimed at the estimated 5.6 million Americans ages 16 to 24 who are neither studying nor working, and will offer full-time positions as well as apprenticeships and internships.
Leaders in government, business and academia are confronting growing income inequality despite steady economic growth and are looking for new entryways into middle-class jobs for American workers who lack a college degree — more than 60 percent of the country’s work force...
[A]n extra 100,000 jobs is less than half of what the economy has been creating each month so far this year, according to Labor Department data.
And while Starbucks typically pays more than the minimum wage, unlike some other chains, the $10 to $15 hourly wages of its 130,000 baristas are often barely enough to make ends meet. The same holds true at other employers participating in the 100,000 Opportunities Initiative, like Walmart and Taco Bell.
Over at CityLab, Laura Bliss discusses the project to map U.S. jobs, which shows jobs are even more concentrated than people:
Though he studies urban economic development, Manduca was still somewhat surprised to see how important downtowns remain as employment concentrators. By a significant measure, most jobs are still outside urban cores, “the result of a retreat from America’s cities that has been going on for decades,” as the New York Times has written. But in some cities, employment—particularly highly skilled and high-paying employment—is growing in downtowns, and declining in the suburbs.
The problem is that while Detroit’s poorest residents might temporarily benefit from this influx of moneyed newcomers—and the businesses and jobs they are promised to bring with them—the specter of mid-century urban sociology perpetually looms overhead.
It’s a cycle already repeating itself in Brooklyn, where transgenerational communities are finding themselves suddenly unable to meet the skyrocketing costs of living. And the percentage of Detroiters living under the poverty line is substantially larger—39.3%, compared with 23.2% in Brooklyn’s Kings County. If Detroit is on the cusp of an urban revival, could it be that, in five-some decades, it will indeed be “the new Brooklyn,” replete with multi-million-dollar properties and shrinking working class? And will Grosse Pointe be “the new Detroit”?
Speaking of Brooklyn, the New York Times looks at the efforts of Mayor de Blasio to create more affordable housing in a city that is rapidly becoming pricey, even for the wealthier classes:
The mayor promises to keep expanding the housing supply while adjusting the affordability mix to the benefit of the poor. As he does so, he cannot lose sight of the New York City Housing Authority, home to 400,000 low-income New Yorkers. Decades of disinvestment and neglect have left much of the vital public-housing stock in a dangerous state of decay, and mismanagement has made the problems worse. Comptroller Scott Stringer has issued audit after audit showing how deep the problems at the authority go. He released another one last week exposing how bureaucratic ineptitude and shady record-keeping were responsible for an appalling repair backlog.
Goldman Sachs recently made waves in the impact investing world when it hired Hugh Lawson to lead its environmental, social and governance (ESG) awareness efforts worldwide and recently acquired Imprint Capital Advisors, a global leader in impact investing. In a podcast published as part of the firm’s ‘Exchanges at Goldman Sachs’ series, Lawson describes the impetus behind the announcement:
What we’ve found over the last few years, is an increasing number of our clients across the spectrum- so this is both institutional investors as well as individuals, have a real interest in at least asking the question: how does my portfolio line up with my broader mission, say if you’re a foundation, or my broader set of values, if you’re an individual. So there’s a measurement and analytic value to ESG investing that we want to be a market leader in.
Meanwhile, Calvert Investment Management, one of the largest sustainable investing specialists with over $13 billion under management, released white paper that details a historical analysis that the firm claims provides “empirical evidence across multiple approaches that ESG factors can enhance risk-adjusted investment performance in a portfolio management context.” And Bank of New York Mellon has its own white paper on social finance and the bank's Anna Kearney says that the development of social impact screens and other impact measurement tools by third parties are critical to the continued development of the sector, the Guardian reports.
While Anna Kearney sees impact investing as a possible solution to the $2.5 trillion funding gap for developing countries, the New York Times reports that others have begun to see potential in encouraging smaller-scale donors like family foundations to give back to the communities that helped their businesses thrive. Families who accumulated wealth through local businesses see impact investing as an opportunity to create positive change in the communities who served them as loyal customers over the years, as well as an opportunity to bring generations of family together for the same cause.
Are hippies driving the impact investing movement? Check out this Bloomberg article on why giving so-called hippies a portfolio might be a good thing:
MSCI looked at two ways to play the ESG craze. The first, which it calls a "tilt" strategy, builds a portfolio that overweights global stocks that score highest in the firm's ESG ratings. The other is a momentum strategy that overweights companies with improving ratings. (In this case, overweight refers to owning more of a stock than is represented in a benchmark index, rather than what happens to a hippie who eats too much Ben & Jerry's). Both strategies outperformed the MSCI World Index over the last eight years, with the momentum strategy picking up steam starting in 2013.
And can philanthropy change social norms? Check out this piece from the Manhattan Institute's Howard Husock in the Chronicle of Philanthropy.